=================================================================UNITED STATES

SECURITIES AND EXCHANGE COMMISSION450 Fifth Street, N.W.Washington, D. C.   20549_______________________

FORM 10-QSB

 

[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2000

[   ] TRANSITION REPORT UNDER SECTION 14 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ____________ to ______________

Commission file number __000-30675___________

eMajix.com, Inc.

(Exact name of Small Business Issuer in its charter)

_____Oklahoma ____	               		_______73-1561191_______ 
(State of Incorporation)   		        (I.R.S. Employer Identification No.)

7450 South Winston Avenue

__________Tulsa, Oklahoma 74136_________

(Address of principal executive offices.)

 

Registrant's telephone number:     (512) 2166-7282

 

As of  October 12,  2000, there were 21,669,000 shares of Common Stock, $0.00005 par value, of the issuer outstanding .

 =================================================================

 
**INDEX**
 
**Part I.  FINANCIAL INFORMATION**
ITEM I.	Financial Statements 

	Balance Sheets	

		September 30, 2000 and March 31, 2000		3

	Statements of Loss

		For the three months and six months ended September 30, 2000

		 and 1999;  and for the period of March 31, 1999 to June 30, 2000	4

	Statements of Changes in Stockholders Equity		5

	Statement of Cash Flows

		For the six months ended September 30, 2000 and 1999;

		and for the period of March 31, 1999 to September 30, 2000	6

	Summary of Accounting Policies		7-8

	Notes to Financial Statements		9-10

ITEM 2.	Managements Discussion and Analysis or Plan of Operation		11-12

		

		**PART  II.   OTHER INFORMATION**
Item 1.	Legal Proceedings		13	

Item 2.	Changes in Securities		13

Item 3.	Defaults Upon Senor Securities		13

Item 4.	Submission of matters to a vote to security Holders		13

Item 5.	Other Information		13

Item 6.	Exhibits and Reports on Form 8-K		13
**	Signatures		14
****
 

 
** **
eMajix.com, Inc.(A DEVELOPMENT STAGE COMPANY)BALANCE SHEETS

ASSETS 

	September30,	March 31,  

	2000    	2000	

	(Unaudited)	(Audited)

Current assets:                         

	Cash 	$    5,214	$     27,060 

	Accounts receivable other	1,660	-

	Accounts receivable officer and employee	1,450	-	

	Prepaid expense	_____210	________-
		Total current assets	___8,534	___27,060
  Equipment, net	__14,492	        2,416
Other assets:                      

	Deposits 	 850	-

	Licenses, net  (Note 2)	   __240,326	   252,975

		Total other assets	__241,176	_252,975	         

  	Total assets	                 $  264,202$   282,451 
   	

                LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:                         

	Accounts payable and accrued expense	$     19,706	$     4,620

 	Notes payable, current  (Note 4)	__100,000	   250,000 
	

	Total current liabilities 	__119,706	_254,620
Commitments and contingencies (Notes 1, and 5)     

Stockholders' equity:

Common stock, $.00005 par value; 

	200,000,000 shares authorized; 

	21,669,000 and 20,872,500 issued and outstanding		

	September 30, 2000 and March 31, 2000, respectively	1,083	1,044

Additional paid-in capital	319,932	36,931 

Deficit accumulated during the 

	development stage                  	              _ (176,519)	 __(10,144)

	Total stockholders equity 	__144,496	___27,831

	Total liabilities and stockholders equity                               $  264,202,	 	 $  282,451 
 

 

See accompanying summary of accounting policies and 

notes to financial statements.

eMajix.com, Inc. 

(A DEVELOPMENT STAGE COMPANY)STATEMENTS OF LOSS (Unaudited)

 

                                                        		Date from   

                                                      		 Inception

                                      	  		     (March 30,1999)  

	Three Months Ended	Six Months Ended	to        

                                       	  September 30,	 September 30,	September 30,

                                        	2000	  1999         	2000         	1999	2000
Revenues                     	$          -	$          - 	$        - 	$          - 	$             -
Operating expenses:                               

 	 

	Consulting fees	9,515	-	23,139	-	28,339

	Depreciation & amortization	7,422	 -	14,335	-	14,335

	Payroll	35,500	-	47,500	-	47,500

	Professional services	28,463	-	  41,911	-	41,911

 	Taxes,  payroll	3,143	-	4,413	-	4,413

	Other expense	__20,825	___25	30,732	___310	__35,676
	         Total operating expenses 	__104,868	___25	_162,030	___310	_172,174
		

Other expense

Interest expense	__(2,016)	  _____-	(4,345) 	_____-	___(4,345)

Net loss	$ (106,884)	$   (25)	$ (166,375)	$   (310)	$(176,519)

Net loss per share basic	$ (.005)	$ (.000)	$ (.008)	$ (.000)
	

Weighted average number 

 Of shares basic	21,646,957	3,000,000	21,425,196	3,000,000				

		

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying summary of accounting policies and

notes to financial statements.

eMajix.com, Inc.(A DEVELOPMENT STAGE COMPANY)STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) 

                                        	Deficit
	 Accumulated
	Additional  	During the
	Common Stock 	  Paid-in     Development
                         	Shares	Amount	 Capital    	 Stage    	Total
Common stock issued for: 

	Cash at $0.001 per share 	19,000,000	$  960	$   8,385	$	-		$ 9,345	
	Cash at $0.0005 per share 	1,500,000	65	590	-		655	
	Cash at $0.333 per share	75,000	4	24,996	-		25,000

	 

	License agreement at 

	$0.01 per share	297,500	15	  2,960	-		2,975

Net loss    	____-____ 	  ____-_	____-___	  (10,144)	    (10,144)	

Balance March 31, 2000	20,872,500	1,044	 36,931	  (10,144)	 27,831

 

Common stock issued for: 

	Cash at $0.333 per share	676,200	34	225,366	-	225,400	

	Cash at $1.00 per share	25,000	1	24,999	-	25,000

	Services	94,900	4	32,136	-	32,140

	Equipment	400	0	500	-	500		

Net loss	____-____	____-_	____-___	(166,375)	(166,375)

Balance September 30, 2000	21,669,000	  $ 1,083	$319,932	$(176,519)	$144,496,
	 

			

		
 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying summary of accounting policies and

notes to financial statements.

eMajix.com, Inc.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CASH FLOWS (Unaudited)

                                                                                                		Date from   

                                                      		 Inception

                                      	  		     (March 30,1999)  

	Six  Months Ended		to        

                                       	September 30, 	September 30,	September 30,

                                        		2000	  1999         	2000 

 Cash flows from operating activities:                                 

Net (loss) 	$(166,375)	$ (310)	$ (176,519)

Adjustments to reconcile net loss to cash

 Provided (used) by operating activities:

	Depreciation and amortization	14,335	-	14,335

	Stock issued for equipment	500	-	500	Stock issued for services:	32,140	-	32,140

	Changes in operating assets and liabilities:                               

		Accounts receivable	(3,010)	-	(3,010)

		Prepaid expense	(310)	-	(310)

		Accounts payable and accrued expense	15,086	_____30	___19,706
	Net cash used in operating activities	(107,634)	      (280)	   (113,158)

Investing activities: Purchase of fixed assets	(13,762)	-	   (16,178)  

 Other assets	___(850)	________-	___(850)

Cash used in investing activities 	(14,612	                -	_  (17,028)

Financing activities:                                 

	Note payable - related party		 	100,000

	Proceeds from sale of common stock 	250,400	   1,500	    285,400 

	Repayment of note payable 	(150,000)	   ________-	       (250,000)     

Net cash provided by financing activities	 	      100,400	    __   1,500	135,400
Net increase (decrease) in cash	  	(21,846)	1,220	5,214

Cash, beginning of period		_27,060	         -    	__   -__
Cash, end of period 	$ 5,214	$   1,220	$  5,214

Supplemental disclosures of cash flow information:                                

Cash paid during the period for:                                 

	Interest                              	$          -	$       -	     $       - 	Income taxes	$          -	$       -	   $        -
Noncash financing activities:                               

	Issuance of common stock in 

	exchange for ClearVideo license          	$      -     	   $             -	 $      2,975

	Issuance of common stock for service 	 32,140	-	32,140

	Issuance of common stock for equipment	500	-	500	

	Issuance of note payable in 

	exchange for ClearVideo license	            -   	             -	   250,000

		

See accompanying summary of accounting policies and

notes to financial statements.

eMajix.com, Inc.

(A DEVELOPMENT STAGE COMPANY)

SUMMARY OF ACCOUNTING POLICIES

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-QSB andItems 303 and 310(b) of Regulation S-B.  Accordingly, they do not include all of the information and footnotes required by generally accepted principles for complete financial statements.  In the opinion of management, all adjustments (consisting ofnormal recurring adjustments) considered necessary for a fair presentation have been included.  Operating results for the three month and six month periods ended September 30, 2000, are not necessarily indicative of the results that may be expected forthe year ended March 31, 2001.  For further information, refer to the financial statements and footnotes thereto included in the eMajix.com, Inc. or the "Company" audited financial statements for the year ended March 31, 2000 included in theCompany Form 10-SB.
**Nature of Business -  eMajix.com, Inc. ("the Company") is a development stage enterprise which holds an exclusive license to 1) compile, display, use, copy and modify ClearVideo source code and create enhancements to the source code, 2) use theClearVideo source code, its run-time versions and any derivatives created by the Company, 3) the right to manufacture for the purpose of distributing and sub-licensing products and services created by any derivatives to end users in run time versions, 4)the right to sublicense the rights granted by the licensor to the Company, 5) and the right to enter into a research and development agreement with another entity for developing new products provided that the Company will own at least (50%) or more of thevoting securities of such entity.  The Company intends to offer video compression services primarily for downloading and streaming high quality video with synchronized audio for use on the Internet, various advertising applications, television, and cablebroadcasting companies.  The Company was incorporated pursuant to the laws of the state of Oklahoma on March 30, 1999 as Southern Wireless, Inc.  The Company changed its name to eMajix.com, Inc. on April 5, 2000.
**Cash Equivalents -  For financial reporting purposes, the Company considers all highly liquid investments with an original maturity of three months or less when purchased to be a cash equivalent.  Financial instruments, which potentiallysubject the Company to a concentration of credit risk, consist of cash and cash equivalents.  Cash and cash equivalents consist of funds deposited with various high credit quality financial institutions.
**Equipment -  Equipment is recorded at cost.  Depreciation and amortization are provided using the straight-line method over the useful lives of the respective assets.  Major additions and improvements are capitalized.  Upon retirement ordisposal, the cost and related accumulated depreciation or amortization are removed from the accounts and any gain or loss is reflected in operations. 
**Licenses -  The costs associated with acquiring exclusive licensing rights to patented technology have been capitalized and are being charged to expense using the straight line method of amortization over ten years, the estimated remaininguseful lives of the patents.

In accordance with the provisions of Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long- lived Assets and for Long-lived Assets to be Disposed of", management of theCompany reviews the carrying value of its intangible assets on a regular basis.  Estimated undiscounted future cash flows from the intangible assets are compared with the current carrying value.  Reductions to the carrying value are recorded to the extentthe net book value of the property exceeds the estimate of future discounted cash flows.
**Income Taxes -   Income taxes are provided based on the liability method of accounting pursuant to SFAS No. 109, "Accounting for Income Taxes."  Under this approach, deferred income taxes are recorded to reflect the taxconsequences on future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each yearend.  A valuation allowance is recorded against deferred tax assets as management does not believe the Companyhas met the "more likely than not" standard imposed by SFAS No. 109 to allow recognition of such an asset.
**Estimates -  The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  Actual results could differ from those estimates.
**Fair Value of Financial Instruments -  The carrying amounts reported in the balance sheet for cash equivalents and accrued expenses approximate fair value because of the immediate or short-term maturity of these financialinstruments. 
**Research and Development Costs -  Research and development costs are charged to expense as incurred.
**Net Loss Per Share -   SFAS No. 128 requires dual presentation of basic EPS and diluted EPS on the face of all income statements for all entities with complex capital structures.   Basic EPS is computed asnet income divided by the weighted average number of common shares outstanding for the period.  Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options, warrants and other convertible securities.  TheCompany had dilutive potential common stock at September 30, 2000, however, the diluted EPS has not been shown as the effect of the incremental shares would be antidilutive.  
**Stock Based Compensation - 	The Company accounts for employee stock options under APB Opinion No. 25 "Accounting for Stock Issued to Employees, " ("APB25").  The company has also adopted Statement ofAccounting Standards No. 123, "Accounting for Stock Based Compensation, "  (SFAS 123)  for disclosure purposes.  Accordingly, compensation cost for stock options is measured as the excess, if any, of the quoted market price of the Company'sstock at the measurement date over the amount an employee must pay to acquire the stock.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

eMajix.com, Inc.

(A DEVELOPMENT STAGE COMPANY)NOTES TO FINANCIAL STATEMENTS

1.   Development Stage Operations and Going Concern

The Company has been in the development stage since its inception.  The Company has no recurring source of revenue and has incurred losses since inception.  These factors raise substantial doubt about the ability to continue as a goingconcern.  The financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.

Management of the Company has undertaken certain actions to address these conditions.  Management currently plans to commence production in the third quarter of this year.  To this end, management is currently in negotiations withpotential customers and with marketing representatives to establish a product channel.  Funds required to carry out management's plans are expected to be derived from future stock sales or borrowings from outside parties.  There can be no assurances thatthe Company will be successful in executing its plans.

2.   Licenses

In March 2000, the Company acquired exclusive licensing rights, from Iterated Systems, Inc., to compile, use, copy and modify ClearVideo Source Code and to create and manufacture products and services.Additionally, the license agreement provides that the Company may sublicense any products and services which it creates using the technology under the licensing agreement.  The license was acquired for  $250,000 and the issuance of 297,500 shares ofcommon stock, valued at $2,975. A provision for amortization of the license agreement totaled $6,324 and $12,649 for the three and six month periods ended September 30, 2000, respectively.

3.   Income Taxes

At September 30, 2000 and March 31, 2000, the Company had net deferred tax assets of approximately $60,000 and $3,500 respectively, principally arising from net operating loss carryforwards for income tax purposes.  As management ofthe Company cannot determine that it is more likely than not that the Company will realize the benefit of the net deferred tax asset, a valuation allowance equal to the net deferred tax asset has been established at March 31, 2000. At September 30, 2000and March 31, 2000, the Company has net operating loss carryforwards totaling approximately $10,144, which will expire in the year 2015.

4.   Notes Payable

	Notes payable at September 30, 2000 and March 31, 2000, consist of the following:
		September 30,	March 31.

	     2000	  2000	

Non-interest bearing note payable to Iterated Systems, Inc.,

due on May 15, 2000, secured by all tangible and intangible

assets of the Company	$              -	     $	150,000

8% unsecured note payable to Ryan Corley, President of 

the Company, due on demand	   100,000		   100,000
	Total maturities, all current	$ 100,000		$  250,000
 

5.   Anti-Dilution Clause

The agreement with Iterated Systems, Inc., contains an anti-dilution clause whereby the percentage of ownership of the Company common stock by Iterated shall be no less than 1.25% of the total outstanding shares at any given time.This provision shall terminate after the last day of the first sixty (60) day period during which : (i) the common stock of the Company is traded on NASDAQ, or the American or the New York Stock Exchange and (ii) the Market Capitalization of the Companydoes not fall below fifty million dollars and (iii)  the 297,500 shares of common stock that Iterated received under the agreement become free trading Rule 144 stock or are covered by a registration statement in compliance with the Act and (iv) the shareprice of the Company shares traded on NASDAQ, the American Stock Exchange or the New York Stock exchange does not fall below $2.10.  This provision also terminates if Iterated sells or disposes of the shares that it received under this agreement.

6.   Stock Transactions

	During the quarter ended September 30, 2000, the Company issued 125,200 shares of its restricted Rule 144 Common Stock to two accredited individuals in exchange for $58,400 to help meet working capital needs.  The Company alsoissued 57,000 shares of its restricted Rule 144 Common Stock to one individual for $19,000 in services and 400 shares of its restricted Rule 144 Common stock to another individual for equipment purchased during this quarter.

 

7.	Stock Options

On June 8, 2000, the board of directors granted an employee and a member of the board of directors options to purchase 200,000 shares each of Company restricted Rule 144 Common Stock at $.40 per share.  The options are exercisable atany time prior to June 8, 2003.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
**Item 2.	**Managements Discussion and Analysis or Plan of Operation**
	The following plan of operation, discussion of the results of operations and financial conditions should be read in conjunction with the financial statements and related notes appearing in this report.

	eMajix.com, Inc. (the "Company") is a development stage enterprise formed under the laws of the State of Oklahoma on March 30, 1999.   On March 17, 2000, the Company entered into an exclusive license agreement for theworld-wide rights to certain copyrighted and trademarked software, denoted as "ClearVideo", for fractal digitization and compression of video images with quality audio synchronization. ClearVideo can reduce video files by approximately 95-98%and virtually duplicate the quality of the original files.  ClearVideo should revolutionize how video with synchronized audio files are transmitted over both narrow and broadband lines.  With the compression results obtainable, almost any Internet usershould be able to download compressed video files with synchronized audio over ordinary analog connections or digital connections in less time.  

	The Company intends to commence marketing ClearVideo during the third quarter upon completion of modifications and updating of the source code for ClearVideo initially by licensing the technology to third parties, offeringcompression services, downloading and streaming services to customers.

	The Company currently can satisfy it current cash requirements for approximately 15 days and has a plan in place to raise additional working capital by the sale of shares of the Company common stock to select perspectiveindividuals.  This plan should provide the additional necessary funds required to enable the Company to complete the updating and revisions to the source code for ClearVideo until the Company can generate enough cash flow from operations to sustain itsoperations.

	The Company does not anticipate any significant cash requirements for the purchase of any facilities.  The Company will be required to purchase additional equipment to provide compression services to prospective customers.

The Company currently has three full time employees on the payroll and six part time employees that are being compensated with shares of the Company restricted Rule 144 Common stock.  It is anticipated that the Company will need tohire an additional three to six full time employees in order to complete the updating of the source code and the commencement of marketing the product.  

	The Company generated revenues of $-0- during the fiscal quarter and six months ended September 30, 2000, as compared to $-0- in the comparable periods of the prior fiscal year.   The Company generated no revenue for the currentfiscal period due to the effort expended in updating the source code for the licensed ClearVideo software acquired in March of this year.  The Company expects to generate revenue upon the completion of the source code updates by the end of the thirdquarter.  

	General and administrative (operating costs) for the Company totaled $104,868 and $162,030 during the three and six months ended September 30, 2000, respectively, as compared to $25 and $310 the comparable periods of the priorfiscal year. Most of the current period cost is comprised of consulting fees and payroll costs associated with the updating of the source code for ClearVideo, legal and professional fees incurred in preparation of the annual report for the year endedMarch 31, 2000 and the preparation and filing of the Form 10SB, and other administrative cost involved in setting up the Company in preparation for operations.  During the comparable period of the prior year the Company had no business activity.

	Interest and financing cost totaled $2,016 and 4,345 during the three and six month periods ended September 30, 2000, respectively, as compared to $-0- during the comparable periods for 1999.

	The Company did no record any income tax expense during the current three and six months periods or in the comparable periods a year-ago due to the net operating losses incurred during these periods.

	Net loss for the three months and six months ended September 30, 2000, was $106,884 and $166,375 that equated to loss per share of ($.005 and ($.008), respectively for the comparable periods of 1999 were $25 and $310, respectivelythat equated to a nil loss per share in each period.  Virtually all of the 2000 loss was due to the costs incurred in consulting fees and payroll costs associated with the updating of the source code for ClearVideo, legal and professional fees incurred inpreparation of the annual report for the year ended March 31, 2000 and the preparation and filing of the Form 10SB

	At September 30, 2000, the Company had cash and cash equivalents of $5,214 a decrease of $21,846 from March 31, 2000.  The decrease was due to expenditures relative to updating the source code for ClearVideo and legal andprofessional fees incurred in the annual examination of the Company financial statements and preparation of the Form10-SB.

Statement Regarding Forward-Looking Statements.

This Quarterly Report includes "forward-looking statements" within the meaning of Section 27A of the Exchange Act which represent the expectations or beliefs concerning future events that involve risks and uncertainties,including but not limited to the demand for Company products and services and the costs associated with such goods and services.  All other statements other than statements of historical fact included in this Quarterly Report including, withoutlimitation, the statements under "Managements Discussion and Analysis or Plan of Operations" and elsewhere in the Quarterly Report, are forward-looking statements.  While the Company believes that the expectations reflected in suchforward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct.

NO CURRENT TRADING MARKET FOR THE COMPANYS SECURITIES.  There is currently no established public trading market for the securities of the Company.  The Company has applied for admission to quotation of its securities on the NASD OTCBulletin Board and, if and when qualified, it intends to apply for admission to quotation on the NASDAQ SmallCap Market.  There can be no assurance that an active or regular trading market for the common stock will develop or that, if developed, will besustained.  Various factor, such as operating results, changes in laws, rules or regulations, general market fluctuations, changes in financial estimates by securities analysts and other factors may have a significant impact on the market of the Companysecurities.  The market price for the securities of public companies often experience wide fluctuations that are not necessarily related to the operating performance of such public companies such as high interest rates or impact of overseas markets.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
**PART II    OTHER INFORMATION**
Item 1.	Legal Proceedings

We are not a party to any material legal proceedings.

Item 2.	Changes in Securities

Not applicable

Item 3.	Defaults Upon Senor Securities

Not applicable

Item 4.	Submission of matters to a vote to security Holders

Not applicable		

Item 5.	Other Information

Not applicable

Item 6.	Exhibits and Reports on Form 8-K

(a) 	Exhibits

	27 Financial Data Schedule

 

 

 

 

 

 

 

 

 

 

 
**SIGNATURES**
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized

		eMajix.com, Inc.______
		    (Registrant)	

Dated:   October 12, 2000	/s/ Ryan Corley________ 
			     (Signature)

			Ryan Corley___________
			President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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